Taxpayer is full time dependent student from NY, school is in MA and issued 2 1099MISC each for $3000 one is box 7 one box 3..Monies used to pay for travel and living for school year in foreign country...Netherlands. Of course, the $6000 did not cover flights, rents etc while student was in Europe; parents have picked up the rest. Any creative ideas?? Thanks John
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Wow
So what DID the $6k cover??
It seems that if the funds were more or less scholarships/grants-in-aid they would have been reported differently, including perhaps on our friendly Form 1098-T.
Aside from that, things could get really sticky if MA starts looking for a tax return for the money paid out. Of course, if the pieces fall together poorly (depending on what kind of facts are out there - was student perhaps "working" also?) you could have a situation where NY taxes the income and then the NY tax on same is perhaps offset by the non-resident MA tax.
Keep us posted on this mess........................
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A 1098T was issued and it shows over 17k in scholarships. Amounts billed were over 36k and parents have cancelled checks for most of the difference, so the Amer Opp 2500 credit will be taken. The son did not work study or anything at the school. I'm thinking of trying to get rid of the income on a sch C ez, his occupation is "International Student" and then take the travel and living expenses while in the Netherlands..Any thoughts???Comment
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A Job ???
I don't like that approach for a Sch C.Originally posted by Got2csun View Post
Heck, many on these boards do not even list what is likely some types of "employment" on a Schedule C in the first place. And what exactly would you use for the Sch C code for that "international student" job?
Is it more likely someone in the school financial office made an error on the Forms 1099-MISC? It almost sounds as if the school was providing some kind of extra compensation (to cover living abroad expenses?), which can legitimately turn into taxable income under the proper circumstances. Consider the case of someone who receives a full-ride scholarship and DOES receive taxable income from such.... As much as you might like to do so, you cannot always "get rid of" taxable income.
FWIW: A recent client has a child who has been offered such a full-ride scholarship. As part of the honors program, the student MUST study a semester abroad. The school had verbiage along the lines of "although we cannot pay the living expenses for such, the school frequently will provide some compensation to offset those expenses...blah...blah...blah." That may well be what is going on with your client.
You need more facts. However, I just cannot fathom how a student could have a "job" as such and then even more creatively justify any "business expenses" for such.....
FEComment
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I agree with you; my tongue was a bit in my cheek. Here in Ithaca we have several "professional" students who seem to be taking classes forever.!!! If I flow one 3000 to line seven and the other to line 21, the feds get 271 bucks in taxes...Surprisingly MA doesn't tax it-he qualifies for no tax status...but of course NY gets their $125...Thanks for your input. JohnComment
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This may be from left field, but is it possible that one 1099 is a corrected version of the other?Comment
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Incorrect 1099?
This might be something you want to check into. I had a client whose daughter studied abroad. The school gave her money back because she had to pay abroad instead of at the school for a semester. She ended up getting a 1099misc. We had her question it and it WAS incorrect. It never should have been issued.
Better check!!!
RaeComment
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